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Nonprofit delaying defaults on clients' homes through layered scheme

Published: Saturday, August 17, 2013 at 11:25 p.m.

Last Modified: Saturday, August 17, 2013 at 11:25 p.m.

A Sarasota nonprofit advertised as a government-sponsored foreclosure rescue is using its clients' homes for a sweeping real estate scheme — delaying defaults through recurrent bankruptcy filings while renting the houses out, a Herald-Tribune investigation has found.

Keeping Kids in Their Home Foundation Corp. and related entities have enticed scores of severely delinquent borrowers from Tampa to Miami to hand over their deeds for just $100, while using dubious techniques to evade mortgage lenders and skirt taxes on those transactions.

The parents of famed wire-walker Nik Wallenda, real estate flippers, a karate sensei and a local pastor are among the borrowers who took out multiple loans against their homes during the housing bubble. When the market slumped and foreclosure was imminent, each turned to Aleksandr Filipskiy and his foundation for help.

Filipskiy has managed to stall those defaults for years by routinely transferring properties to new shell companies and nonprofits he creates, filing for bankruptcy protection under each entity to block the foreclosure proceedings.

All the while, he leases the distressed homes back to their troubled buyers, rents them to others and even lives in one with his family. His brother inhabits another, the Herald-Tribune's investigation revealed.

“There's a lot of misrepresentation here,” said Andrew Rose, a special agent supervisor with the Florida Department of Law Enforcement. “Someone should never deed their house over to anyone without the bank's consent. These guys are predators. It's just sad and disgusting.”

Filipskiy maintains that his methods are not only legal, but also highly effective. With plans to expand, Filipskiy said he believes his program will soon become a progressive new approach to foreclosure defense.

He vows not to make any unreasonable profits from the operation, while negotiating a settlement for his “clients.”

“Our entire process is trying to get to a settlement,” Filipskiy said. “It's the same model as a short sale. . . . If this was about money, I would be rich.”

So far, no settlements have been reached.

Experts also worry that the efforts used to evade a foreclosure will eventually make lenders more aggressive in a so-called deficiency judgment against these former homeowners, who still are responsible for the debt of the homes even after transferring the properties to Filipskiy. Those judgments can result in pay docked directly out of the borrower's bank accounts.

The Herald-Tribune has reviewed thousands of court and property records, interviewed dozens of legal experts and law enforcement officials, and spoken to tenants and homeowners who were clients of Filipskiy.

The newspaper's investigation revealed that Filipskiy's program may violate several federal and state laws, while abusing a system created to help recession-battered homeowners overcome a hardship.

Legal experts believe Filipskiy bends the law through questionable bankruptcies filed to delay a foreclosure, while potentially evading real estate transfer taxes and falsely claiming his nonprofit is certified by the U.S. Department of Housing and Urban Development.

Depending on precisely what Filipskiy told clients before they agreed to hand over their homes, soliciting those transfers also could constitute fraud, according to the FDLE.

With copycat programs now sprouting up across the country, the operation could have ramifications for an economy still struggling to heal from the foreclosure crisis that started almost five years ago.

Personal experience

Filipskiy is an adept salesman who moved to the United States from Russia when he was 12.

With a knack for business, Filipskiy earned his general contractor license and grew a homebuilding company in Port Charlotte to a staff of nearly 30 during Southwest Florida's historic housing boom.

But when Community National Bank of Sarasota cut his business line of credit as construction activity froze during the Great Recession, Filipskiy found himself in financial trouble.

Filipskiy received a $360,000 loan from the now-defunct bank in September 2006 to build a house on Gasparilla Road in Rotonda West. In less than a year, the note went into default, court records show.

His company, Polo Contractors, also bought a house on Acorn Circle in Port Charlotte that year for $174,500, selling the property that same day to Filipskiy's wife for $230,000. He financed the deal with a loan from SunTrust, which ultimately won a $349,506 foreclosure judgment against Filipskiy, according to court records.

During two lengthy sit-down interviews with the Herald-Tribune, Filipskiy said that his own experience with foreclosure is what fueled his desire to help others. Filipskiy, who lost his family home and was out of work for nearly three years, blames the banking system for the pain of the recession.

He recalls police cars showing up at his house — while he was out of town on business — to evict his pregnant wife and small child.

“I would ask the bank how the economy is doing, and they would say in the next six months we'll be rocking and rolling,” said Filipskiy, now 35. “Who knows the economy better than a banker? But things just kept getting worse.”

Filipskiy said he believes he has a mission: to give families a second chance to rebuild their ruined financial lives.

But legal experts, law enforcement and government officials familiarized with Filipskiy's techniques by the Herald-Tribune say he is going about it the wrong way — preying on those hit hardest by the downturn and abusing overloaded court dockets clogged with foreclosures and bankruptcies.

“He's using a loophole to create a business and taking advantage of other people's misfortune,” said Joseph Lehn, a Sarasota foreclosure and bankruptcy attorney. “The system just isn't set up to catch these people — there are too many foreclosures.”

Poised to lose homes

Filipskiy finds homeowners who owe more on their homes than they are worth and who are facing imminent default on second and third mortgages usually taken out during the boom.

Poised to lose their house to the bank, the borrowers agree to transfer their properties to Filipskiy through a quitclaim deed for $100. The transfer typically occurs just months before a lender files a notice to foreclose. The quitclaim essentially passes any rights the owners have to the property to Filipskiy.

The transactions send banks on a chase to find the collateral tied to the promissory note, and also force lenders to modify their filing to include Filipskiy, court records show.

But just as the lender and its attorneys think they've cornered him, Filipskiy files for bankruptcy protection — a federal process that takes precedence over local court defaults and that halts all foreclosure proceedings and scheduled auctions.

Midway through that bankruptcy, Filipskiy will often transfer the home to another shell company or a nonprofit that he owns, forcing lenders to give chase yet again, court records show. He then files a new bankruptcy case for that entity to further stymie repossession efforts.

Meanwhile, Filipskiy and his organizations routinely file fraud lawsuits against the banks, seeking to have the foreclosures dismissed.

In almost all of those cases, a judge has ruled his claims to be frivolous.

In one instance, a homeowner in Worcester, Mass., transferred a home with a $504,000 delinquent mortgage five times. It ultimately ended up in the hands of Filipskiy and his Keeping Kids in Their Home Foundation.

Through the use of quitclaim deeds and shell corporations, four bankruptcies ultimately affected the property. As a result, there were two canceled foreclosure sales and the bank's repossession of the home was delayed for seven years, federal court records show.

In all, distressed homeowners in Sarasota, Manatee and Charlotte counties have deeded 25 homes to Filipskiy since late 2010. Filipskiy ultimately funneled all of them into his companies and nonprofits, a review of tax deeds showed.

Filipskiy has taken a similar path with at least 10 other houses in Hillsborough, Pinellas, Lee, Collier and Miami-Dade counties. And he has obtained deeds in Illinois, California and Colorado, court records show.

Filipskiy associates taking a similar approach to evading foreclosures have picked up dozens more.

“It's the old scam where somebody will say: 'I will help you out, make this thing go away and rent it to you. Then once you get back on your feet, we'll sell it back to you,' ” said Joe Adamaitis, president of the Gulf Coast Mortgage Bankers Association.

“It's going to catch up to him.”

The typical owners

The typical homeowners who turn to Filipskiy look like William Paulsen and Patricia Szemkus.

The duo purchased a two-bedroom, two-bathroom home on Rossanne Place in Englewood for $96,900 in February 2003, using a $77,500 mortgage from Liberty Savings Bank.

They took out a $140,000 second mortgage in March 2005 with Countrywide Home Loans and another $154,500 loan from Bank of America in February 2008, borrowing a total of $372,000 in five years against a home valued by the county property appraiser at $73,300, records show.

The two gave their home to Filipskiy in April 2011 through a $100 quitclaim deed. That was only four months before Bank of America filed its first foreclosure notice.

Filipskiy filed for personal bankruptcy protection a year later, transferring the deed in August 2012 to Keeping Kids in Their Home Foundation, which also is in bankruptcy. In October 2012, Filipskiy moved the home to Abundant Life Trust, another of his companies in bankruptcy.

The three lenders have been unable to take possession of the home.

The patterns were similar for each of Filipskiy's deals in Southwest Florida, and his clients include some well-known residents.

Terrance and Delilah Troffer — Sarasota wirewalker Nik Wallenda's parents — transferred a home on Myrtle Street (where their son often practiced) to Filipskiy for $100 in July 2011. That was 10 months before Sarasota Coastal Credit Union filed to foreclose. Filipskiy has since transferred it to Keeping Kids in Their Home Foundation and Abundant Life Trust, court records show.

Susan and Paul Moon, who run North Port's Shotokan Karate Club, were poised to default on $291,763 in loans against their home before finding Filipskiy.

Stephen Schlabach, the pastor of Sarasota's nondenominational Shining Light Church, defaulted on a $2.33 million loan from Fifth Third Bank against his church property on Fruitville Road.

While Filipskiy was not directly involved in the church's foreclosure, Schlabach turned to associates of Filipskiy after he and his wife also could not pay $827,275 in loans against their home on Duck Pond Lane in Sarasota.

Filipskiy frequently transferred the Duck Pond property between his various entities, but rather than renting it out, Filipskiy now lives there without the burden of a mortgage.

He also has taken homes from property flippers, like Shawn and Elise Schrock. During the real estate boom, the couple made $238,600 on three risky property flips financed with bank mortgages. But when a default on their own home seemed imminent, they deeded it to Filipskiy.

The Herald-Tribune contacted dozens of homeowners who have deeded property to Filipskiy through calls, Facebook messages and personal visits. While many explained their situation, none would comment for publication.

So far, just one Southwest Florida home transferred to Keeping Kids in Their Home Foundation has been successfully auctioned by a lender.

Still on the hook

While Filipskiy has assumed the deeds from these borrowers and used bankruptcies to make it tougher for banks to foreclose, legal experts say the original homeowners remain on the hook for the outstanding debts.

In almost all instances, mortgage borrowers also are prohibited under their promissory note from selling the house without the bank's approval. If the property does change hands, the balance owed to the lender becomes due immediately, unless the lender agreed to a short sale.

“The only thing that's being gained is a little bit of confusion,” said Alan Tannenbaum, a Sarasota real estate attorney. “There's also a serious question” about whether the quitclaim deeds “are a sufficient transfer of money under that circumstance.”

Further, Tannenbaum and other real estate attorneys believe Filipskiy is improperly dodging thousands of dollars in doc stamp taxes used to fund local courts that are grappling with budget shortfalls and overloaded demand. When property changes hands, those involved in the transaction must pay the tax based on the value of the property, which is typically considered the purchase price.

But when the amount is grossly undervalued — like Filipskiy's $100 exchanges — the buyers must instead pay the tax on the remaining balance of any outstanding mortgages. Filipskiy has only been paying taxes on the $100 purchase price — that's 70 cents each, court records show.

Filipskiy says he plans on paying those doc stamps when he reaches a settlement with the mortgage lender on each delinquent property, which has yet to occur.

His nonprofit status at Keeping Kids in the Home Foundation also allows Filipskiy to forgo federal taxes on rental revenue.

To avoid losing the homes to a tax auction, Filipskiy has paid all of his property taxes on time: more than $53,000 in levies for homes in Sarasota and Manatee counties last November alone.

So many levels

FDLE and criminal prosecutors made aware of Filipskiy's efforts through the Herald-Tribune's reporting are now weighing the possibility of their own investigation.

“This is one of the biggest real estate fraud schemes that's going on,” said Melody Schimmel, a certified mortgage fraud investigator and investigative aid for the Sarasota Police Department, who spent 40 years in the banking industry.

“It's illegal on so many levels, and there's just so much of it going on.”

The FDLE has an agent that works with a special FBI task force to examine mortgage fraud in Sarasota. A fraud specialist with the agency said Filipskiy's efforts are among the most layered she has ever heard about.

A veteran prosecutor also said he was convinced the operation violated several laws.

An attorney representing one of the creditors caught on to Filipskiy's efforts in April, asking a federal judge to dismiss a bankruptcy case involving Abundant Life Trust, one of Filipskiy's shell companies, because it was fraudulent.

That case remains pending. But a trustee representing the U.S. government in June also filed a motion to dismiss the case because there was no viable avenue to restructure.

A spokeswoman for the U.S. Trustees office declined to comment.

Despite the warning, Filipskiy has filed for bankruptcy protection again since that time under new entities. The new case trustee, however, has failed to connect the dots.

In his most recent bankruptcy filing in July — through his Abundant Life 122012 Trust — Filipskiy cited $5.7 million in total liabilities, with 67 claims from creditors. The 20 largest unsecured creditors all are mortgage lenders.

He reported $2.3 million in assets, all in real estate he had obtained. Only $100 was listed in active bank accounts.

“Examination of the dockets show that each of the first three bankruptcies lacked a good-faith prosecution,” Michael Gulisano, an attorney representing BLB Trading LLC, wrote in an April motion to dismiss the Abundant Life Trust bankruptcy. “The filing of a bankruptcy petition merely to prevent foreclosure, without the ability or the intent to reorganize, is an abuse of the bankruptcy code.”

“By intentionally and knowingly filing a bankruptcy petition containing false and incomplete information, the debtor committed bankruptcy fraud, a federal offense. . . . The scheme to hinder, defraud and delay is particularly apparent in the most recent bankruptcy filing.”

Filipskiy said he files each bankruptcy with a legitimate attempt to restructure debt on the houses he has obtained.

But the motion by BLB's attorneys says this type of activity constitutes a fraudulent transfer of property and violates at least four federal and state statutes.

Other bankruptcy attorneys interviewed by the Herald-Tribune agreed.

A U.S. Court of Appeals 10th Circuit ruling in 1996 on a case involving the Federal Deposit Insurance Corp. and Nursery Land Development Inc. addresses efforts like Filipskiy's.

In that case, the FDIC had a judgment on a property in Utah and was prepared to foreclose. But the day before the scheduled auction, Nursery Land acquired the property via quitclaim deed without any cash involved, then filed for bankruptcy protection the same day.

The federal appeals court ruled there was no realistic opportunity to reorganize, and that the new property owner filed bankruptcy solely to frustrate the FDIC's foreclosure rights — an abuse of the federal bankruptcy system, according to the three-page decision.

Warning flags

The principal address listed with Florida's Division of Corporations for Keeping Kids in their Home Foundation is a Lakewood Ranch building where Filipskiy keeps a virtual office but has no real physical presence.

The address listed for each of the nonprofit's officers, including Filipskiy and his wife, is a Post Office box at a UPS store on Fruitville Road.

Midway through the Herald-Tribune's investigation, Filipskiy created an intricate website for Keeping Kids in Their Home Foundation, including testimonial videos, contract information and a few details about his program.

The site also advertises the nonprofit as a foreclosure help agency certified by the U.S. Department of Housing and Urban Development.

But neither Keeping Kids nor any of its other affiliates are registered as certified HUD nonprofits, federal records show.

The agency has never heard of them.

A HUD spokeswoman says the department runs every organization seeking HUD certification through an extensive vetting process, and HUD would not condone any tactics similar to the ones deployed by Filipskiy and his partners.

The first warning flag was the quitclaim deeds, said agency spokeswoman Gloria Shanahan.

“Never would HUD condone nor help someone with a property transfer,” Shanahan said. “The idea is to help them to keep their homes.”

Because of the Herald-Tribune's reporting, HUD is now also investigating Filipskiy, who was arrested in Winter Springs in August 1998 on a Hillsborough County warrant.

He was charged with a felony count of forgery and two counts of misdemeanor perjury for allegedly filing a fraudulent insurance claim and lying to police about it, according to the Seminole County Sheriff's Office. He was sentenced to 540 days' probation, records show.

HUD said it could pursue civil damages against Filipskiy's nonprofit or even seek criminal prosecution through the Inspector General's office.

“We still need to determine what the next steps are,” said Brian Sullivan, a HUD spokesman in Washington D.C. “These scam artists are always surfacing in different variations.”

Breaking down walls?

Filipskiy maintains that his program is beneficial for both his homeowners and tenants.

He says by deeding their property to him, borrowers gain far more negotiating power against a bank seeking a foreclosure, making it easier to reach a settlement.

Filipskiy said he offers rent-to-own programs for the houses he has acquired, rebuilding credit for his clients. He said his organization only charges enough rent to cover the cost of maintenance, insurance and taxes.

But many intricacies of his plan, Filipskiy said, are proprietary.

“The idea was never to enrich myself,” Filipskiy said. “It was to break this wall between the bank and the homeowner. I had a vision to create something different that would benefit others.”

Officers of the nonprofit say their model has been a trial-and-error process, and that they continue to refine the system for new homes they plan to acquire.

“There are a lot of people out there attempting to do what we're doing, with varying degrees of success,” said David Eldredge, president of Keeping Kids in their Home Foundation Corp.

“We are kind of pioneers in what we are doing.”

Filipskiy said he has spent more than $1.5 million in attorney fees through the bankruptcies, lawsuits and property transfers.

Investors have advanced funds to Filipskiy and his companies to help pay for those expenses for 10 percent of the profit, bankruptcy records indicate.

“Banks took advantage of people, and the question is when is it going to stop,” Filipskiy said. “We're creating our own negotiation settlement systems to avoid (foreclosure) conflicts.”

Kicking the can

With wounds from the foreclosure crisis still deep, similar programs are popping up throughout the country, including in states like California, Nevada, North Carolina and Massachusetts.

Others in Southwest Florida are using similar approaches, including an associate of Filipskiy, who has been involved in several transactions with him.

Dmitry Dimov, who heads an Englewood nonprofit dubbed Family Home Relief Foundation Corp., has acquired 24 Southwest Florida homes from distressed borrowers through quitclaim deeds. He has been linked to at least four deals with Filipskiy.

Dimov filed for personal bankruptcy in February 2012. As with the accusations against Filipskiy, a bankruptcy case attorney called Dimov's scheme a “fraudulent transfer.”

Dimov could not be reached for comment.

“It really keeps the bank dancing a bit, but in the end, it all works out the same,” said Dennis Black, a real estate consultant in Port Charlotte.

“I find it surprising he's been able to kick the can down the road this long.”

<p>A Sarasota nonprofit advertised as a government-sponsored foreclosure rescue is using its clients' homes for a sweeping real estate scheme — delaying defaults through recurrent bankruptcy filings while renting the houses out, a Herald-Tribune investigation has found.</p><p>Keeping Kids in Their Home Foundation Corp. and related entities have enticed scores of severely delinquent borrowers from Tampa to Miami to hand over their deeds for just $100, while using dubious techniques to evade mortgage lenders and skirt taxes on those transactions.</p><p>The parents of famed wire-walker Nik Wallenda, real estate flippers, a karate sensei and a local pastor are among the borrowers who took out multiple loans against their homes during the housing bubble. When the market slumped and foreclosure was imminent, each turned to Aleksandr Filipskiy and his foundation for help.</p><p>Filipskiy has managed to stall those defaults for years by routinely transferring properties to new shell companies and nonprofits he creates, filing for bankruptcy protection under each entity to block the foreclosure proceedings.</p><p>All the while, he leases the distressed homes back to their troubled buyers, rents them to others and even lives in one with his family. His brother inhabits another, the Herald-Tribune's investigation revealed.</p><p>“There's a lot of misrepresentation here,” said Andrew Rose, a special agent supervisor with the Florida Department of Law Enforcement. “Someone should never deed their house over to anyone without the bank's consent. These guys are predators. It's just sad and disgusting.”</p><p>Filipskiy maintains that his methods are not only legal, but also highly effective. With plans to expand, Filipskiy said he believes his program will soon become a progressive new approach to foreclosure defense. </p><p>He vows not to make any unreasonable profits from the operation, while negotiating a settlement for his “clients.”</p><p>“Our entire process is trying to get to a settlement,” Filipskiy said. “It's the same model as a short sale. . . . If this was about money, I would be rich.”</p><p>So far, no settlements have been reached.</p><p>Experts also worry that the efforts used to evade a foreclosure will eventually make lenders more aggressive in a so-called deficiency judgment against these former homeowners, who still are responsible for the debt of the homes even after transferring the properties to Filipskiy. Those judgments can result in pay docked directly out of the borrower's bank accounts.</p><p>The Herald-Tribune has reviewed thousands of court and property records, interviewed dozens of legal experts and law enforcement officials, and spoken to tenants and homeowners who were clients of Filipskiy.</p><p>The newspaper's investigation revealed that Filipskiy's program may violate several federal and state laws, while abusing a system created to help recession-battered homeowners overcome a hardship.</p><p>Legal experts believe Filipskiy bends the law through questionable bankruptcies filed to delay a foreclosure, while potentially evading real estate transfer taxes and falsely claiming his nonprofit is certified by the U.S. Department of Housing and Urban Development.</p><p>Depending on precisely what Filipskiy told clients before they agreed to hand over their homes, soliciting those transfers also could constitute fraud, according to the FDLE.</p><p>With copycat programs now sprouting up across the country, the operation could have ramifications for an economy still struggling to heal from the foreclosure crisis that started almost five years ago.</p><p><b>Personal experience</b></p><p>Filipskiy is an adept salesman who moved to the United States from Russia when he was 12.</p><p>With a knack for business, Filipskiy earned his general contractor license and grew a homebuilding company in Port Charlotte to a staff of nearly 30 during Southwest Florida's historic housing boom.</p><p>But when Community National Bank of Sarasota cut his business line of credit as construction activity froze during the Great Recession, Filipskiy found himself in financial trouble.</p><p>Filipskiy received a $360,000 loan from the now-defunct bank in September 2006 to build a house on Gasparilla Road in Rotonda West. In less than a year, the note went into default, court records show.</p><p>His company, Polo Contractors, also bought a house on Acorn Circle in Port Charlotte that year for $174,500, selling the property that same day to Filipskiy's wife for $230,000. He financed the deal with a loan from SunTrust, which ultimately won a $349,506 foreclosure judgment against Filipskiy, according to court records.</p><p>During two lengthy sit-down interviews with the Herald-Tribune, Filipskiy said that his own experience with foreclosure is what fueled his desire to help others. Filipskiy, who lost his family home and was out of work for nearly three years, blames the banking system for the pain of the recession.</p><p>He recalls police cars showing up at his house — while he was out of town on business — to evict his pregnant wife and small child.</p><p>“I would ask the bank how the economy is doing, and they would say in the next six months we'll be rocking and rolling,” said Filipskiy, now 35. “Who knows the economy better than a banker? But things just kept getting worse.”</p><p>Filipskiy said he believes he has a mission: to give families a second chance to rebuild their ruined financial lives.</p><p>But legal experts, law enforcement and government officials familiarized with Filipskiy's techniques by the Herald-Tribune say he is going about it the wrong way — preying on those hit hardest by the downturn and abusing overloaded court dockets clogged with foreclosures and bankruptcies.</p><p>“He's using a loophole to create a business and taking advantage of other people's misfortune,” said Joseph Lehn, a Sarasota foreclosure and bankruptcy attorney. “The system just isn't set up to catch these people — there are too many foreclosures.”</p><p><B>Poised to lose homes </B></p><p>Filipskiy finds homeowners who owe more on their homes than they are worth and who are facing imminent default on second and third mortgages usually taken out during the boom.</p><p>Poised to lose their house to the bank, the borrowers agree to transfer their properties to Filipskiy through a quitclaim deed for $100. The transfer typically occurs just months before a lender files a notice to foreclose. The quitclaim essentially passes any rights the owners have to the property to Filipskiy.</p><p>The transactions send banks on a chase to find the collateral tied to the promissory note, and also force lenders to modify their filing to include Filipskiy, court records show.</p><p>But just as the lender and its attorneys think they've cornered him, Filipskiy files for bankruptcy protection — a federal process that takes precedence over local court defaults and that halts all foreclosure proceedings and scheduled auctions.</p><p>Midway through that bankruptcy, Filipskiy will often transfer the home to another shell company or a nonprofit that he owns, forcing lenders to give chase yet again, court records show. He then files a new bankruptcy case for that entity to further stymie repossession efforts.</p><p>Meanwhile, Filipskiy and his organizations routinely file fraud lawsuits against the banks, seeking to have the foreclosures dismissed.</p><p>In almost all of those cases, a judge has ruled his claims to be frivolous.</p><p>In one instance, a homeowner in Worcester, Mass., transferred a home with a $504,000 delinquent mortgage five times. It ultimately ended up in the hands of Filipskiy and his Keeping Kids in Their Home Foundation.</p><p>Through the use of quitclaim deeds and shell corporations, four bankruptcies ultimately affected the property. As a result, there were two canceled foreclosure sales and the bank's repossession of the home was delayed for seven years, federal court records show.</p><p>In all, distressed homeowners in Sarasota, Manatee and Charlotte counties have deeded 25 homes to Filipskiy since late 2010. Filipskiy ultimately funneled all of them into his companies and nonprofits, a review of tax deeds showed.</p><p>Filipskiy has taken a similar path with at least 10 other houses in Hillsborough, Pinellas, Lee, Collier and Miami-Dade counties. And he has obtained deeds in Illinois, California and Colorado, court records show.</p><p>Filipskiy associates taking a similar approach to evading foreclosures have picked up dozens more.</p><p>“It's the old scam where somebody will say: 'I will help you out, make this thing go away and rent it to you. Then once you get back on your feet, we'll sell it back to you,' ” said Joe Adamaitis, president of the Gulf Coast Mortgage Bankers Association. </p><p>“It's going to catch up to him.”</p><p><B>The typical owners</b></p><p>The typical homeowners who turn to Filipskiy look like William Paulsen and Patricia Szemkus.</p><p>The duo purchased a two-bedroom, two-bathroom home on Rossanne Place in Englewood for $96,900 in February 2003, using a $77,500 mortgage from Liberty Savings Bank.</p><p>They took out a $140,000 second mortgage in March 2005 with Countrywide Home Loans and another $154,500 loan from Bank of America in February 2008, borrowing a total of $372,000 in five years against a home valued by the county property appraiser at $73,300, records show.</p><p>The two gave their home to Filipskiy in April 2011 through a $100 quitclaim deed. That was only four months before Bank of America filed its first foreclosure notice.</p><p>Filipskiy filed for personal bankruptcy protection a year later, transferring the deed in August 2012 to Keeping Kids in Their Home Foundation, which also is in bankruptcy. In October 2012, Filipskiy moved the home to Abundant Life Trust, another of his companies in bankruptcy.</p><p>The three lenders have been unable to take possession of the home.</p><p>The patterns were similar for each of Filipskiy's deals in Southwest Florida, and his clients include some well-known residents.</p><p>Terrance and Delilah Troffer — Sarasota wirewalker Nik Wallenda's parents — transferred a home on Myrtle Street (where their son often practiced) to Filipskiy for $100 in July 2011. That was 10 months before Sarasota Coastal Credit Union filed to foreclose. Filipskiy has since transferred it to Keeping Kids in Their Home Foundation and Abundant Life Trust, court records show.</p><p>Susan and Paul Moon, who run North Port's Shotokan Karate Club, were poised to default on $291,763 in loans against their home before finding Filipskiy.</p><p>Stephen Schlabach, the pastor of Sarasota's nondenominational Shining Light Church, defaulted on a $2.33 million loan from Fifth Third Bank against his church property on Fruitville Road. </p><p>While Filipskiy was not directly involved in the church's foreclosure, Schlabach turned to associates of Filipskiy after he and his wife also could not pay $827,275 in loans against their home on Duck Pond Lane in Sarasota.</p><p>Filipskiy frequently transferred the Duck Pond property between his various entities, but rather than renting it out, Filipskiy now lives there without the burden of a mortgage.</p><p>He also has taken homes from property flippers, like Shawn and Elise Schrock. During the real estate boom, the couple made $238,600 on three risky property flips financed with bank mortgages. But when a default on their own home seemed imminent, they deeded it to Filipskiy.</p><p>The Herald-Tribune contacted dozens of homeowners who have deeded property to Filipskiy through calls, Facebook messages and personal visits. While many explained their situation, none would comment for publication.</p><p>So far, just one Southwest Florida home transferred to Keeping Kids in Their Home Foundation has been successfully auctioned by a lender.</p><p><B>Still on the hook</B></p><p>While Filipskiy has assumed the deeds from these borrowers and used bankruptcies to make it tougher for banks to foreclose, legal experts say the original homeowners remain on the hook for the outstanding debts.</p><p>In almost all instances, mortgage borrowers also are prohibited under their promissory note from selling the house without the bank's approval. If the property does change hands, the balance owed to the lender becomes due immediately, unless the lender agreed to a short sale.</p><p>“The only thing that's being gained is a little bit of confusion,” said Alan Tannenbaum, a Sarasota real estate attorney. “There's also a serious question” about whether the quitclaim deeds “are a sufficient transfer of money under that circumstance.”</p><p>Further, Tannenbaum and other real estate attorneys believe Filipskiy is improperly dodging thousands of dollars in doc stamp taxes used to fund local courts that are grappling with budget shortfalls and overloaded demand. When property changes hands, those involved in the transaction must pay the tax based on the value of the property, which is typically considered the purchase price.</p><p>But when the amount is grossly undervalued — like Filipskiy's $100 exchanges — the buyers must instead pay the tax on the remaining balance of any outstanding mortgages. Filipskiy has only been paying taxes on the $100 purchase price — that's 70 cents each, court records show.</p><p>Filipskiy says he plans on paying those doc stamps when he reaches a settlement with the mortgage lender on each delinquent property, which has yet to occur.</p><p>His nonprofit status at Keeping Kids in the Home Foundation also allows Filipskiy to forgo federal taxes on rental revenue.</p><p>To avoid losing the homes to a tax auction, Filipskiy has paid all of his property taxes on time: more than $53,000 in levies for homes in Sarasota and Manatee counties last November alone.</p><p><B>So many levels</b></p><p>FDLE and criminal prosecutors made aware of Filipskiy's efforts through the Herald-Tribune's reporting are now weighing the possibility of their own investigation.</p><p>“This is one of the biggest real estate fraud schemes that's going on,” said Melody Schimmel, a certified mortgage fraud investigator and investigative aid for the Sarasota Police Department, who spent 40 years in the banking industry.</p><p>“It's illegal on so many levels, and there's just so much of it going on.”</p><p>The FDLE has an agent that works with a special FBI task force to examine mortgage fraud in Sarasota. A fraud specialist with the agency said Filipskiy's efforts are among the most layered she has ever heard about.</p><p>A veteran prosecutor also said he was convinced the operation violated several laws.</p><p>An attorney representing one of the creditors caught on to Filipskiy's efforts in April, asking a federal judge to dismiss a bankruptcy case involving Abundant Life Trust, one of Filipskiy's shell companies, because it was fraudulent.</p><p>That case remains pending. But a trustee representing the U.S. government in June also filed a motion to dismiss the case because there was no viable avenue to restructure.</p><p>A spokeswoman for the U.S. Trustees office declined to comment.</p><p>Despite the warning, Filipskiy has filed for bankruptcy protection again since that time under new entities. The new case trustee, however, has failed to connect the dots.</p><p>In his most recent bankruptcy filing in July — through his Abundant Life 122012 Trust — Filipskiy cited $5.7 million in total liabilities, with 67 claims from creditors. The 20 largest unsecured creditors all are mortgage lenders.</p><p>He reported $2.3 million in assets, all in real estate he had obtained. Only $100 was listed in active bank accounts.</p><p>“Examination of the dockets show that each of the first three bankruptcies lacked a good-faith prosecution,” Michael Gulisano, an attorney representing BLB Trading LLC, wrote in an April motion to dismiss the Abundant Life Trust bankruptcy. “The filing of a bankruptcy petition merely to prevent foreclosure, without the ability or the intent to reorganize, is an abuse of the bankruptcy code.”</p><p>“By intentionally and knowingly filing a bankruptcy petition containing false and incomplete information, the debtor committed bankruptcy fraud, a federal offense. . . . The scheme to hinder, defraud and delay is particularly apparent in the most recent bankruptcy filing.”</p><p>Filipskiy said he files each bankruptcy with a legitimate attempt to restructure debt on the houses he has obtained.</p><p>But the motion by BLB's attorneys says this type of activity constitutes a fraudulent transfer of property and violates at least four federal and state statutes.</p><p>Other bankruptcy attorneys interviewed by the Herald-Tribune agreed.</p><p>A U.S. Court of Appeals 10th Circuit ruling in 1996 on a case involving the Federal Deposit Insurance Corp. and Nursery Land Development Inc. addresses efforts like Filipskiy's.</p><p>In that case, the FDIC had a judgment on a property in Utah and was prepared to foreclose. But the day before the scheduled auction, Nursery Land acquired the property via quitclaim deed without any cash involved, then filed for bankruptcy protection the same day.</p><p>The federal appeals court ruled there was no realistic opportunity to reorganize, and that the new property owner filed bankruptcy solely to frustrate the FDIC's foreclosure rights — an abuse of the federal bankruptcy system, according to the three-page decision.</p><p><B>Warning flags</b></p><p>The principal address listed with Florida's Division of Corporations for Keeping Kids in their Home Foundation is a Lakewood Ranch building where Filipskiy keeps a virtual office but has no real physical presence. </p><p>The address listed for each of the nonprofit's officers, including Filipskiy and his wife, is a Post Office box at a UPS store on Fruitville Road.</p><p>Midway through the Herald-Tribune's investigation, Filipskiy created an intricate website for Keeping Kids in Their Home Foundation, including testimonial videos, contract information and a few details about his program.</p><p>The site also advertises the nonprofit as a foreclosure help agency certified by the U.S. Department of Housing and Urban Development.</p><p>But neither Keeping Kids nor any of its other affiliates are registered as certified HUD nonprofits, federal records show.</p><p>The agency has never heard of them.</p><p>A HUD spokeswoman says the department runs every organization seeking HUD certification through an extensive vetting process, and HUD would not condone any tactics similar to the ones deployed by Filipskiy and his partners.</p><p>The first warning flag was the quitclaim deeds, said agency spokeswoman Gloria Shanahan.</p><p>“Never would HUD condone nor help someone with a property transfer,” Shanahan said. “The idea is to help them to keep their homes.”</p><p>Because of the Herald-Tribune's reporting, HUD is now also investigating Filipskiy, who was arrested in Winter Springs in August 1998 on a Hillsborough County warrant.</p><p>He was charged with a felony count of forgery and two counts of misdemeanor perjury for allegedly filing a fraudulent insurance claim and lying to police about it, according to the Seminole County Sheriff's Office. He was sentenced to 540 days' probation, records show.</p><p>HUD said it could pursue civil damages against Filipskiy's nonprofit or even seek criminal prosecution through the Inspector General's office.</p><p>“We still need to determine what the next steps are,” said Brian Sullivan, a HUD spokesman in Washington D.C. “These scam artists are always surfacing in different variations.”</p><p><B>Breaking down walls?</b></p><p>Filipskiy maintains that his program is beneficial for both his homeowners and tenants.</p><p>He says by deeding their property to him, borrowers gain far more negotiating power against a bank seeking a foreclosure, making it easier to reach a settlement.</p><p>Filipskiy said he offers rent-to-own programs for the houses he has acquired, rebuilding credit for his clients. He said his organization only charges enough rent to cover the cost of maintenance, insurance and taxes.</p><p>But many intricacies of his plan, Filipskiy said, are proprietary. </p><p>“The idea was never to enrich myself,” Filipskiy said. “It was to break this wall between the bank and the homeowner. I had a vision to create something different that would benefit others.”</p><p>Officers of the nonprofit say their model has been a trial-and-error process, and that they continue to refine the system for new homes they plan to acquire.</p><p>“There are a lot of people out there attempting to do what we're doing, with varying degrees of success,” said David Eldredge, president of Keeping Kids in their Home Foundation Corp. </p><p>“We are kind of pioneers in what we are doing.”</p><p>Filipskiy said he has spent more than $1.5 million in attorney fees through the bankruptcies, lawsuits and property transfers.</p><p>Investors have advanced funds to Filipskiy and his companies to help pay for those expenses for 10 percent of the profit, bankruptcy records indicate.</p><p>“Banks took advantage of people, and the question is when is it going to stop,” Filipskiy said. “We're creating our own negotiation settlement systems to avoid (foreclosure) conflicts.”</p><p><B>Kicking the can</b></p><p>With wounds from the foreclosure crisis still deep, similar programs are popping up throughout the country, including in states like California, Nevada, North Carolina and Massachusetts.</p><p>Others in Southwest Florida are using similar approaches, including an associate of Filipskiy, who has been involved in several transactions with him.</p><p>Dmitry Dimov, who heads an Englewood nonprofit dubbed Family Home Relief Foundation Corp., has acquired 24 Southwest Florida homes from distressed borrowers through quitclaim deeds. He has been linked to at least four deals with Filipskiy.</p><p>Dimov filed for personal bankruptcy in February 2012. As with the accusations against Filipskiy, a bankruptcy case attorney called Dimov's scheme a “fraudulent transfer.”</p><p>Dimov could not be reached for comment. </p><p>“It really keeps the bank dancing a bit, but in the end, it all works out the same,” said Dennis Black, a real estate consultant in Port Charlotte. </p><p>“I find it surprising he's been able to kick the can down the road this long.”</p>